Will Portfolio Expansion Aid Alarm.com (ALRM) Q1 Earnings?
Alarm.com Holdings, Inc. ALRM will report first-quarter 2018 results on May 3. In the fourth quarter, the company delivered a positive earnings surprise of 8.3%.
The surprise history has been impressive in Alarm.com’s case. The company surpassed estimates in each of the trailing four quarters, with an average positive surprise of 55.9%.
We observe that the company’s shares have gained 23.2% in a year’s time, outperforming its industry’s decline of 31.3%.
Let’s see how things are shaping up for this announcement.
Portfolio Expansion to Drive the Top Line
Alarm.com has been expanding and enhancing its portfolio of video cameras to tap a wide range of commercial customers. In the fourth quarter,the company enlarged its portfolio of video cameras to tap a wide range of commercial customers. It expanded its platform to intensify customer engagement and retention. The company unveiled a new smart thermostat that combines cloudintelligence with more advanced device hardware. This will broaden the range of systems with which Alarm.com can integrate. We expect these factors to make significant contributions to Alarm.com’s hardware and other revenues in the to-be-reported quarter.
Partnerships & Acquisitions to Expand Top Line
In the last reported quarter, the company partnered with Rheem, a leading global manufacturer of heating, cooling and water heating equipment. The deal will expand the roster of smart energy devices that utilities can control and manage at scale through EnergyHub’s Mercury 3.0 platform. We expect these moves to contribute to Alarm.com’s revenues and margin expansion in the soon-to-be-reported quarter.
Customer Connection Program to Increase Upsell and Retention
The company is also making considerable progress with its Customer Connection program aimed at increasing upsell and retention. Since its launch, the company has successfully added several pre-configured campaigns to help service providers increase up-sells and referrals, and boost consumer engagement. Significant progress is also expected on this front.
What Our Model Suggests
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if these have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Alarm.com has a Zacks Rank #1 and an Earnings ESP of +5.44%, a combination that suggests that the company is likely to beat estimates this time around.
Other Stocks to Consider
We also see likely earnings beat for each of the following companies:
Mastercard Incorporated MA has an Earnings ESP of +0.03% and a Zacks Rank #2. The company is slated to report quarterly numbers on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
WEX Inc. WEX has an Earnings ESP of +0.44% and a Zacks Rank of 2. The company is slated to report quarterly results on May 3.
FLEETCOR Technologies, Inc. FLT has an Earnings ESP of +0.79% and a Zacks Rank #2. The company will report quarterly numbers on May 3.
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